Summary Lungu has assured that government will not allow a single mining job to be lost
LUSAKA (AFP) - Zambia s new president Edgar Lungu on Monday said the government will act to prevent job losses if Canadian miner Barrick pulls out over the trippling of mining royalties in the copper rich nation.
Lungu "has assured that government will not allow a single mining job to be lost and has accordingly directed the ministry of mines to ensure that operations at Lumwana Mine are not idled for care and maintenance," his office said in a statement.
Zambia hiked the mineral royalty tax to 20 percent from six percent on January 1, placing the government at loggerheads with mining companies already reeling from a fall in global commodity prices.
In a sign of the fallout from the new tax regime, Canadian firm Barrick Gold announced it would suspend operations at its Lumwana copper mine, and would start laying off workers in March putting close to 4,000 jobs at risk.
Lungu s office said if the Toronto-based firm forges ahead to close the mine, the government would look for a "strategic technical partner" to team up with the state-run mining investment company ZCCM-IH to keep the mine open.
Zambia is one of the world s largest producers of copper -- a metal used in plumbing, heating, electrical and telecommunications wiring.
Lungu, who narrowly won last month s presidential election following the death of Michael Sata, said his government is "rapidly" addressing concerns raised by mining companies over the new mineral royalty tax.
If government does not review the disputed taxes, Zambia s Chamber of Mines estimates the country stands to lose $7 billion, the equivalent of 30 percent of GDP, over the next five years.
An estimated 12,000 direct jobs could be lost this year alone. Despite copper contributing around 70 percent of foreign exchange earnings, Zambia is ranked among the world s most poverty-stricken countries.
